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The New York Court of Appeals affirmed the dismissal of an action brought by hedge fund investors against the fund's law firm. the court concluded that "neither the allegations in the complaint nor the surrounding circumstances give rise to the reasonable inference that [the law firm] participated in a scheme to defraud or knew about the falsity of the two contested statements in the offering memorandum." The allegations against the law firm were pleaded in a conclusory fashion that could not withsrtand judgment on the pleadings. (Mike Frisch)